If I'm reading this correctly, it seems like this deferral only applies to the employee portion of Social Security tax (6.2%), not the Medicare portion (1.45%), right? And employers still have to pay their matching portion? Has anyone used TurboTax or other tax software to model how this might affect their 2025 return?

I'm really concerned about the timing of all this. The deferral period runs February through May 2025, but we're already in April - that's only about 2 months of actual deferral for most people. Is it really worth the administrative hassle and potential confusion for such a short period? Also, I notice the memo mentions that the Treasury Secretary is supposed to issue guidance to employers, but I haven't seen any official guidance yet. Without clear instructions, I can see why many employers might just choose not to implement this at all. Has anyone's employer actually started the deferral process, or are most companies still waiting for more details? The whole thing feels rushed, especially since we're already partway through the tax year. I'm wondering if this is more about political messaging than actual tax relief, given how short the deferral period is and how close we are to tax filing season.

Has anyone actually claimed this credit as unmarried co-owners yet? I'm wondering if the IRS software flags returns when two people claim credits for the same address. My accountant is worried we might both get audited if we split a heat pump credit.

I went through this exact situation last year with my partner for our heat pump installation. We're both on the deed and split the $8,200 cost 50/50. Here's what we learned from our tax preparer: Each person files their own Form 5695 with their portion of the expenses. So if you split $9,000 evenly, you'd each claim $4,500 on line 1 of Form 5695. The 30% credit calculates to $1,350 each, well under the $2,000 individual cap. The statement we attached was simple: "I am claiming 50% of the qualifying energy efficient home improvement expenses for the heat pump system installed at [our address] based on my 50% ownership interest and financial contribution totaling $4,500." Key things to remember: - Keep all receipts showing how much each person paid - Both statements should match (same percentages) - The $2,000 cap applies per taxpayer, not per property - Installation costs count toward the credit too We had no issues with our returns and both got our full credits. The IRS seems to handle joint occupancy situations fine as long as you're transparent about the split and have documentation.

Big heads up for you: at 16, you might not have to pay self-employment tax at all if this is considered a dependent's unearned income! The rules are different if your parents claim you as a dependent, which I'm guessing they do. You should really have your parents talk to a tax professional about this because it gets complicated with minor's taxes.

Hey Chloe! I totally get the stress - I was in a similar boat when I started freelancing at 17. Here's what helped me get organized: First, don't panic about missing the September deadline. The penalty for late quarterly payments isn't huge, especially on a first-time basis. Calculate what you owe for Q3 and pay it ASAP along with your Q4 payment due January 15th. For record-keeping, I'd suggest setting up a simple system now: - Open a separate checking account for business income/expenses if possible - Track all business expenses in a spreadsheet (internet %, laptop use, software, etc.) - Set aside 25-30% of each payment for taxes The Schedule SE form is definitely confusing - ignore the farm stuff, that doesn't apply to you. You'll report your net profit from Schedule C (income minus expenses) on the SE form to calculate self-employment tax. Since you can't create an IRS account yet, have a parent help you set up online payments or mail estimated tax payments with Form 1040ES. You're actually ahead of many people by catching this now instead of at tax time! Consider getting help from a tax pro for your first filing - it's worth the peace of mind and you'll learn the process for next year.

My tax advisor gave me conflicting information on this last year! She said my spouse needed to show at least some profit from self-employment for us to use my Dependent Care FSA. We ended up not using the FSA and just took the tax credit instead, which worked out better for us anyway since we have 2 kids and high childcare costs. Have you compared whether the FSA or the tax credit would be better in your situation? Sometimes the tax credit can be more beneficial, especially if your spouse might have little/no income.

I went through this exact situation when my husband started his consulting business in 2022. The key thing I learned is that the IRS doesn't require a minimum profit amount for your spouse to be considered "gainfully employed" for Dependent Care FSA purposes. What matters is that they have a legitimate business with profit intent. Even if your spouse shows a loss in 2023 due to startup costs, as long as they're genuinely operating a business (keeping records, spending time on it, marketing, etc.), they qualify as self-employed. However, your FSA contribution limit will be capped at their net earnings for the year. One thing to consider: if your spouse expects to have minimal or negative income in the year you want to use the FSA, you might want to compare the FSA benefit against taking the Child and Dependent Care Credit instead. The credit doesn't have the same earned income limitation and might be more beneficial in your situation. Also, make sure your spouse keeps detailed business records - receipts, time logs, business plan, etc. This documentation will be crucial if the IRS ever questions whether it's a legitimate business versus a hobby. Good luck with the new business venture!

Great question! I actually went through this same situation last year when I had to amend my return after moving. You should definitely use your NEW current address on the 1040-X form. The IRS needs to know where to reach you now, not where you used to live. When you file the amended return with your updated address, it automatically updates your address in their system, so you won't need to file a separate change of address form (though some people do it anyway for extra peace of mind). Just make sure you're clear in Part III about what you're actually amending - the address change itself isn't typically a reason to amend unless there are other errors you're fixing. The IRS will process the address update along with whatever other corrections you're making. One heads up - if you're mailing in a paper 1040-X, processing times have been pretty slow lately (12-20 weeks), so be patient. But using your current address ensures any correspondence or refund checks come to the right place!

Just to add another perspective - I've been through this situation twice now (moved a lot for work). Always use your current address on the 1040-X, but here's something that might help: if you're worried about timing or want to be extra thorough, you can also call the IRS practitioner priority line if you have a tax professional help you, or use Form 8822 to officially change your address before filing the amendment. One thing I learned the hard way - if you're expecting any other IRS correspondence (like notices from your original return), make sure you set up mail forwarding with USPS from your old address. The IRS systems don't always update immediately across all departments, so you might still get some mail sent to your old address even after filing the 1040-X with your new one. Also, keep copies of everything! With the longer processing times for paper amendments, having your own records makes it much easier to track what's happening if you need to follow up later.